It’s been a highly debatable year in Mallorca real estate market, because it’s been discussed over and over in printed and online press, hailed as the year that can make or break the local market for a long period of time. But let’s analyze for a bit what the 2011 year brought to Mallorca real estate players.
First off, it has to be said that overall sales in 2011 did not rival the ones from 2010, so right at first glance, 2011 saw a decrease from the previous year. Maybe it’s because of this that the Spanish government announced late last year that it was giving out incentives to new buyers so that it would revitalize the property market in Mallorca. The measures are in fact a reduction on the VAT applicable on new purchases to only 4%. And this when the average property price has varied somewhere between 900,000 and 1 million euros.
Also in 2011 it was noticed that the main foreign buyers have been the German nationals, followed by British, as people who purchased the most property in Mallorca. However, 2011 also saw the appearance on the market of more diversified buyers from countries such as Denmark, Sweden, Russia, Switzerland and Austria.
This past year there also seems to have been an increase in the demand for new, scenic properties or with good accessibility. However, it seems that this very market has the shortest supply since projects begun prior to 2010 have been very few and investors are now proceeding cautiously until the situation becomes clearer.
As far as the rental market goes, the market here seems to be faring much better since there was a 20% increase from transactions registered the previous year. This is somewhat in accordance with the ever increasing popularity of Mallorca island, which last year saw record-breaking numbers of tourists arriving here.
For the coming year, there are predictions of a slight increase as insecurity over one’s wealth in paper investments will continue to drive investors into solid assets such as property found in Mallorca.